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ACTIONS FOR DECLARATIONS OF
FUTURE RIGHTS.
Tariff Act Aug. 5, 1909, c. 6, § 38, par. 5, 36
Stat. 112, held to authorize the Commissioner
of Internal Revenue to amend the return of a
corporation upon which the special excise tax
United States officers cannot be compelled is assessed as a "false" return if it is incor-
to come into court and have future rights as
rect although made in good faith, even after
to income tax adjudicated.-Pennsylvania the tax assessed on the original return has been
Cement Co. v. Bradley Contracting Co., 1497.
paid.-Eliot Nat. Bank v. Gill, 311.
The provision being that in case of such false
or fraudulent return the commissioner shall
Liability for income taxes, see Income Tax, make an amended return "upon the discovery
8 18.
Taxes interfering with interstate commerce,
see Commerce, § 1.
See Immigration Tax; Income Tax, § 20.
ASSESSMENT OF TAXES.
War Revenue Act June 13, 1898, c. 448, § 27,
30 Stat. 464, which provides that every person,
company, etc., doing the business of refining
petroleum or sugar, or owning a pipe line,
whose gross annual receipts exceed $250.000,
"shall be subject to pay annually a special ex-
cise tax" on the amount of their gross re-
ceipts in excess of said sum, and which further
provides that a true and accurate return of the
amount of gross receipts as aforesaid shall be
made and rendered monthly by such persons or
companies, requires the payment of such tax
annually, and on annual receipts; and a regu-
lation of the commissioner requiring the as-
sessment and collection of the tax monthly, on
the monthly returns, is unauthorized.-Spreck-
els Sugar Refining Co. v. McClain, 81.
Under Corporation Tax Act (Act Cong. Aug.
5, 1909, c. 6, § 38, 36 Stat. 112, all corpora-
tions of the character described are required
to file returns, though their net profits are in-
sufficient to render them subject to the tax.-
U. S. v. Military Const. Co., 263; U. S. v.
Acorn Roofing Co., 267.
thereof at any time within three years after
said return is due," the corrected assessment is
not required to be made within the three years.
-Id.
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Rev. St. § 3173, authorizes the commission-
er to compel the production of books of grain
brokers who have failed to pay the stamp tax
imposed on sales of grain by Act Oct. 22, 1914,
§ 22.-Id.
Rev. St. § 3173, authorizing the Commis-
sioner of Internal Revenue to require persons
who fail or refuse to make proper returns to
produce their books, is not unconstitutional.
-Id.
Rev. St. § 3224, providing that no suit for
the purpose of restraining the assessment or
collection of any tax shall be maintained in
any court, applies to a suit to restrain pro-
ceedings to make the assessments.-Id.
Where return of officers of a trust company
showed it was engaged in banking business,
but did not disclose amount of capital so used,
etc., held, that collector of revenue might pro-
ceed to assess tax provided for by War Reve-
nue Act 1914, § 3, subd. 1, in accordance with
Rev. St. § 3176, without demanding a further
return. Anderson v. Farmers' Loan & Trust
Co., 787.
Though the return did not furnish a basis
for the assessment, collector's assessment
against a trust company engaged in the bank-
ing business under War Revenue Act 1914, §
3, subd. 1, is prima facie valid.-Id.
Under Act Aug. 5, 1909, imposing excise tax
of 1 per cent. on net income of corporations,
and providing for new assessment in case of
false and fraudulent reports, and for recovery
of additional taxes, the word "false" means
untrue or incorrect, and does not necessarily
mean "intentionally" or "fraudulently" false.-
U. S. v. Nashville, C. & St. L. Ry., 936.
Under Income Tax Act Oct. 3, 1913, § 2, par.
E, assessment of tax for 1913, in May, 1915,
was in time, if the taxpayer's return was
"false," which evidently does not mean "fraud-
ulent," but merely untrue or incorrect.-Woods
v. Lewellyn, 1005.
Under Income Tax Act Feb. 24, 1919, §
223, and the regulations made thereunder, re-
quiring income returns to be made under oath,
such oath may be taken before any person au-
thorized by the local law to administer oaths.
-U. S. v. Benowitz, 1127.
Assessment on stock dividend cannot be sus-
tained on appeal as assessment of cash divi-
dend.-Loomis v. Wattles, 1210.
Where a person made sworn returns of his
income each year from 1866 to 1872, and paid
income taxes accordingly, the commissioner
of internal revenue could not, in 1878, under
Rev. St. § 3182, make a new or corrected list
in respect to the income taxes of such person
for those years, because the 15 months named
in that section had elapsed.-In re Archer,
2017.
Under Internal Revenue Act June 30, 1804, §
20 (13 Stat. 229), which authorizes an addi-
tional assessment or reassessment of the in-
come, tax within 15 months after the delivery
of the annual list to the collector in all cases
in which it is incomplete or imperfect, etc.,
an assessor of internal revenue has power
to reassess the income tax of a citizen who has
already paid the tax first assessed against him.
-Doll v. Evans, 2040.
Act Cong. June 30, 1864, § 14, ("Income Tax
Law"), authorizing the assessor to inquire
whether a return made was false or fraudu-
lent, and, if he so finds, requiring him to add
100 per cent. to the tax, is not an attempted in-
vasion of the judicial authority, since it invests
the assessor with no power to sentence a per-
son, but merely clothes him with authority to
ascertain whether the taxpayer has subjected
himself to the penalty declared.-Id.
Under the act of congress of July 13, 1866,
the assessment of the tax of income received
in gold coin should be made on the amount re-
duced to its equivalent market value in legal
tender currency.-Pacific Ins. Co. v. Soule,
The provisions of section 14 of the internal
revenue, act of 1864, as amended by the act
of 1866, which authorize the assessor to do
various things in order to get at the taxable
property of a party whom he is seeking to
assess and who will not make proper returns
of his estate, do not make it obligatory on him
to do so.-Bailey v. New York C. & H. R. R.
Co., 2325.
Exemption is not to be deducted before ap-
portioning income into brackets for excess
profits tax.-Greenport Basin & Construction
Co. v. U. S., 3189.
If any indistinguishable or inseparable part
or proportion of an assessment for internal
revenue is illegal, the whole assessment is il-
legal.-Hubbard v. Brainard, 3351.
Assessment unnecessary where tax is a fixed See Occupation or Business Taxes, § 5.
percentage.-U. S. v. Waddell Inv. Co., 1541.
Assessment of income tax presumptively
proper, but presumption not conclusive in ac-
AUTOMOBILE MANUFACTURERS.
tion to recover back.-Wilson v. Eisner, 1744. See Occupation or Business Taxes, § 6.
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Bankrupt corporation as mere subsidiary of
partnership, see Corporations, § 1.
Title & Trust Co. v. Title Guaranty & Surety
Co., 2864.
The United States is not bound by the pro-
visions of the Bankruptcy Act, unless specific-
§ 1. Jurisdiction to determine claims for ally mentioned therein.-Id.
Court of bankruptcy may determine accuracy
or justice of tax due United States.-In re
W. P. Williams Oil Corporation, 1188.
Court has jurisdiction in invitum to liquidate
taxes against bankrupt claimed by United
States. In re Anderson, 1522.
§ 8. Priority of claim for taxes.
Under Bankr. Act July 1, 1898, c. 541, § 64a,
30 Stat. 563, which provides that "the court
shall order the trustee to pay all taxes legally
due and owing by the bankrupt to the United
States, state, county, district, and municipal-
ity in advance of the payment of dividends to
creditors," all taxes which were collectible
§ 2. Personal liability of trustee for from the bankrupt prior to his bankruptcy
Trustee not personally liable for income tax
of which he had no knowledge.-U. S. v. Eyges,
1838.
§ 3. Recovery from trustee of taxes paid
by purchasers of property of bank-
rupt estate.
Buyers of liquor as tax-free can recover from
trustee in bankruptcy tax they had to pay.-
Heyman v. U. S., 1809.
§ 4. Tax as expenses of administration.
Floor tax on whisky sold by trustee is pay-
able before distribution.-Heyman v. U. S.,
1809.
must be paid, and it is immaterial that through
the negligence of the officers charged with
their collection, taxes have accumulated until
the aggregate amount with interest will ab-
sorb all or a large part of the estate. In re
Weissman, 179.
Under Bankr. Act, § 64a, taxes held not pre-
ferred claim, but in a class by themselves,
standing ahead of preferred claims.—In re Ash-
land Emery & Corundum Co., 595.
Interest on taxes, making payment, when re-
ceived, equivalent to payment at appointed
time, held a part of the taxes, and entitled to
priority in payment, under Bankr. Act, § 64a.
Penalty imposed for nonpayment of tax when
due held not a part of the tax, and not entitied
§ 5. Necessity of presentation of claim to priority of payment, under Bankr. Act, §
for taxes.
64a.-Id.
United States may be required to file claim
for taxes. In re Anderson, 1638.
Statute contemplates taxes shall be present-
ed to court.-U. S. v. Eyges, 1838.
That statute requiring payment of addition-
al sum if tax is not paid when due calls such
sum interest held not conclusive on bankruptcy
court that it is not a penalty.-Id.
Under 3 Gen. St. N. J. 1895, p. 3339, § 261,
§ 6. Allowance or disallowance of claim and page 3704, § 7, excess of interest borne by
Government's claim for taxes passed on in
first instance by bankruptcy court and not al-
lowed as matter of course.-In re General Film
Corporation, 1482.
corporate franchise tax after it becomes due
above legal interest held a penalty, and not en-
titled to priority in bankruptcy.—Id.
Bankruptcy Act, §§ 64a, 64b (Comp. St. 8
9648), as to payment of taxes and debts hav-
§ 7. Priority of United States as creditor ing priority, are in pari materia with Rev. St.
in general.
§ 3466, giving debts due the United States from
insolvent debtors priority, and supersede such
In all cases of insolvency or bankruptcy of section in part, and the right of taxes to prior-
one indebted to the United States, the govern-ity is governed by those sections, and not by
ment is entitled to priority of payment out of
the debtor's property.-U. S. v. Fisher, 2161.
section 3466.-In re Jacobson, 1162.
Under Bankruptcy Act, § 64a, providing for
the payment of taxes in advance of dividends
to creditors, and section 1, subd. 9 (section
9585), defining "creditor” as including any one
owning a demand provable in bankruptcy,.tax-
es are not entitled to priority over fees of the
clerk, trustee, and referee, and other expenses
of administration.-Id.
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A tax is a "debt."-In re J. Menist & Co.,
1987.
Rev. St. U. S. § 5219.-First Nat. Bank v.
County of Chehalis, 2648.
Rev. St. U. S. § 5219, providing that state
taxation of national bank stock shall not be at
a greater rate than is assessed on "other mon-
eyed capital" of citizens of the state, refers
only to moneyed capital which comes into com-
petition with the business of national banks;
and the exemption of the stocks and bonds of
insurance, wharf, and gas companies, or other
noncompeting capital or credits, is not an un-
lawful discrimination against national banks
whose stock is taxed.-Id.
A bill by a national bank to enjoin the col-
Interest on delinquent income tax allowable lection of taxes on its stock, alleging that mon-
at legal rate only.-Id.
eyed capital in the state, a specified amount of
which was invested in stocks and bonds of in-
Annual franchise tax on corporations held ap-surance, wharf, and gas companies, and another
portionable on bankruptcy of corporation.-In
re Ajax Dress Co., 1990.
Statutory penalties for nonpayment of taxes
allowable only to extent of legal interest.-Id.
See Occupation or Business Taxes, § 7.
Direct taxes, see Direct Taxes.
Power of state to tax shares of national bank
see States, § 2.
specified amount in loans and securities pay-
able to citizens, the nature of which was not
indicated other than by the allegation of the
legal conclusion that they were "taxable," was
exempted from taxation, does not show a dis-
crimination against the bank in violation of
Rev. St. U. S. § 5219, by taxing its stock at a
greater rate than was assessed on other mon-
eyed capital in the hands of citizens of the
state.-Id.
St. Ky. 1894, c. 108, providing for a tax on
the "franchise" of corporations, associations,
etc. (section 4077), taking the whole act to-
§ 1. Relation between bank and deposi-gether, and especially sections 4078-4081, is
tor in general.
Deposits are not the property of the depos-
itors, but of the bank receiving them; the re-
lation of a bank and its depositors being that
of debtor and creditor, so that deposits and in-
vestments are equally assets of the bank.-
Anderson v. Farmers' Loan & Trust Co., 787.
A state bank's charter provided that the bank
should pay to the state an annual tax of one-
half of 1 per cent. on each share of capital
stock, which should be in lieu of all other tax-
es. Held, that this tax was not on the capital
stock, but on the shares of stock, which were
not subject to further taxation.-Bank of Com-
merce v. State of Tennessee, 2642.
An exemption of the shares of stock in a
bank from general taxation upon the payment
of an annual tax of a certain per cent. does not
exempt the surplus and undivided profits.-Id.
Act Wash. March 9, 1891, § 21, provides for
the assessment and taxation of national bank
stock to the bank. Section 23 renders the
bank liable for the tax as agent for the share-
holder, and authorizes it to pay the tax out of
the shareholder's profits or charge it to his
account. Held, that a tax so assessed is not
a tax on the capital of the bank forbidden by
to be construed, not as a tax on the franchise
in the technical sense, but upon all the intangi-
ble property of the corporation; and this tax
not being levied upon the shares of stock in
the names of the shareholders, nor equivalent
in law to a tax so levied, the provision is void
as applied to national banking associations, as
not being authorized by Rev. St. U. S. 8 5219,
which permits the states to tax the shares in
such an association in the names of the hold-
ers thereof.-Owensboro Nat. Bank v. City of
Owensboro, 2670.
BONDED WAREHOUSES AND
GOODS IN BOND.
"Soakage" defined.-Bernheim Distilling Co.
v. Mayes, 1279.
BONDS UNDER REVENUE LAWS.
Official bonds, see Officers and Agents of Rev-
enue Service..
The provision of Act Cong. July 13, 1866,
that no suit shall be maintained for the recov-
ery of any tax erroneously or illegally assessed
until an appeal is first made to the commis-
sioner of internal revenue, and a decision had,
does not prevent the defendant in a suit
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